TMI Blog1986 (2) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by him outside India was not included in his total income. The ITO was, however, of the view that moneys representing salary are received in India is taxable. The convention put forth on behalf of the assessee that the entire salary received from Highsea Steamship Co. Ltd. is to be excluded from the total income of the assessee was not accepted by the ITO. A sum of Rs. 56,000 received as salary from Highsea Steamship Co. Ltd., was included by the ITO in the total income of the assessee. This amount represented salary earned by the assessee outside India but received by him in India during the relevant accounting year from his foreign employer. 3. The mater was carried in appeal before the AAC who was of the view that even though the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 ITR 551. Reliance has also been placed on the decision of the Supreme Court in the case of CIT v. Toshoku Ltd. [1980] 125 ITR 525. 5. The learned departmental representative has, on the other hand, fully supported the orders of the authorities below. It was submitted that since the salary income was not taxed in the hands of the assessee on accrual basis it was rightly taxed on receipt basis under section 15. It was further submitted that in view of section 5(2)(a) the total income of the previous year of the assessee who is a non-resident includes income which is received or is deemed to be received in India in such year by or on behalf of such person. It was further pointed out that in this case, admittedly, the assessee received sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e India. This fact is not in dispute. There is no dispute that during the relevant accounting year the amount of Rs. 56,000 as salary income was received by the assessee in India and it is on this basis that this part of the income has been subjected to tax in the hands of the assessee by the ITO and his action on the point has been confirmed in appeal by the AAC. According to the contention advanced before us on behalf of department the salary income amounting to Rs. 56,000 is taxable in India by virtue of the provisions contained in section 5(2) (a), which says that the total income of a non-resident includes which is received in India during any previous year. We agree with the contention advanced by the learned departmental representat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded in the total income of any person for any previous year it shall not be included again in the total income of the person when the salary becomes due. 10. Section 15 thus, contemplates tax on salary which is due, whether paid or not, as well as on salary which is paid whether due or not. The words 'due ...., whether paid or not' occurring in section 15(a) cover all sums which are due irrespective of whether they are paid or not paid, therefore, the portion of salary due and paid as well as the portion due and not paid are both covered under clause (a). Section 15 does not give an option to the ITO to assess the income in the year of accrual or in the year of receipt according to his choice, or to the assessee to offer it when it bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of any option of either ITO or the assessee arises. It may be pointed out that the provisions of section 7(1) of the 1922 Act corresponds to the provisions of section 15 of the 1961 Act. 11. In the case of Bhuban Mohan Banerjee it was further held by the High Court that if any of the kinds of payment contemplated in section 7(1) becomes due, then, irrespective of whether it is or is not paid in the year in which it become due, it must be brought under assessment as the income of that year. There can be no question of assessing it is the income of the year when it is actually paid the payment basis is relevant only for the kinds of payment contemplated by the words 'payments of amounts which are not due' for example, advances by way o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Japanese company as income received by the Japanese company in India. On these facts it was held by the Supreme Court that clauses (a) and (c) of section 4(1) of the 1922 Act (which corresponds to section 5 of the 1961 Act), can be read disjunctively and that the assessee could be assessed as the statutory agents of the Japanese company in respect of moneys credited in the assessee's books on receipt basis. The facts of that case are, thus, quite different and in that case the Supreme Court had no occassion to consider the scope of section 7(1) of the 1922 Act which corresponds to section 15 of the 1961 Act. 14. True, in this case, salary income accrued outside India, but was received in India in the same accounting year. It is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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